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Arbitraging a Discriminatory Labor Market: Black Workers at the Ford Motor Company, 19181947

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Listed:
  • Christopher L. Foote

    (Harvard University)

  • Warren C. Whatley

    (University of Michigan)

  • Gavin Wright

    (Stanford University)

Abstract

The 191847 employee records of the Ford Motor Company provide a rare opportunity to study a firm willing to hire black workers when similar firms would not. The evidence suggests that Ford did profit from discrimination elsewhere, but not by paying blacks less than whites. An apparent "wage-equity constraint" prevailed, resulting in virtually no racial variation in wages inside Ford. An implication was that blacks quit Ford jobs less often than whites, holding working conditions constant. Arbitrage profit came from exploiting this nonwage margin, as Ford placed blacks in hot, dangerous foundry jobs where quit rates were generally high.

Suggested Citation

  • Christopher L. Foote & Warren C. Whatley & Gavin Wright, 2003. "Arbitraging a Discriminatory Labor Market: Black Workers at the Ford Motor Company, 19181947," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 493-532, July.
  • Handle: RePEc:ucp:jlabec:v:21:y:2003:i:3:p:493-532
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    References listed on IDEAS

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    1. Sundstrom, William A., 1992. "Last Hired, First Fired? Unemployment and Urban Black Workers During the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 52(02), pages 415-429, June.
    2. Donohue, John J, III & Heckman, James, 1991. "Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1603-1643, December.
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    Cited by:

    1. Depew, Briggs & Sørensen, Todd A., 2013. "The elasticity of labor supply to the firm over the business cycle," Labour Economics, Elsevier, vol. 24(C), pages 196-204.
    2. Depew, Briggs & Sorensen, Todd A., 2011. "Elasticity of Supply to the Firm and the Business Cycle," IZA Discussion Papers 5928, Institute for the Study of Labor (IZA).
    3. Lanning, Jonathan A., 2014. "A search model with endogenous job destruction and discrimination: Why equal wage policies may not eliminate wage disparity," Labour Economics, Elsevier, vol. 26(C), pages 55-71.

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